Mass. economy roars back in 1st quarter
Grows at 11.3 percent annualized pace, almost double national rate
STATE HOUSE NEWS SERVICE
THE MASSACHUSETTS ECONOMY grew at a much faster pace than the national economy in the first quarter and the economic analysts at MassBenchmarks see that trend continuing over the coming months.
Real gross domestic product in Massachusetts increased at an 11.3 percent annualized growth rate in the first quarter, compared to the 6.4 percent growth rate in the nation’s economy, the local economists reported Thursday.
Alan Clayton-Matthews, a Northeastern University economics professor and MassBenchmarks senior contributing editor, said Massachusetts “has had more potential for a stronger rebound than the nation” because the economic shutdown in the Bay State was broader than elsewhere and led to greater job losses.
Massachusetts payroll employment grew at a 6.8 percent annual clip during the first quarter, more than three times as fast as the 2.1 percent national rate, MassBenchmarks said. Despite that relatively strong growth, employment in Massachusetts remained 8.3 percent below the first quarter of 2020 while the national jobs deficit was 5.6 percent on a year-over-year basis.
Consumer spending growth was also robust in the first quarter — compared to the first quarter of 2020, spending on items subject to the regular sales and motor vehicle sales taxes was up 13.1 percent. MassBenchmarks categorized wage and salary growth in Massachusetts in the first quarter as “very strong.”Looking ahead to the in-progress second quarter and the third quarter, MassBenchmarks said it expects growth in Massachusetts will “remain strong through the spring and summer months.” The group estimated Massachusetts real gross domestic product will rise at a 7.5 percent annual rate in the second quarter and an 8.5 percent rate in the third quarter.
Those rosy outlooks could be held back, MassBenchmarks said, by delays or disruptions in vaccination efforts, the emergence of vaccine-resistant COVID-19 variants and bottlenecks caused by supply chain disruptions or labor shortages here and abroad.